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NEWS & STORIES

Inequality

The widening gap between the world’s richest and poorest people is tearing societies apart. Too many still toil in extreme poverty. In contrast, wealth is increasingly concentrated in the hands of a few, who can use it to capture disproportionate power to shape the future. The widening gap between the richest and poorest is damaging economies and pushing more people into poverty. There are practical ways to close the gap.

Right now, across the world, millions of people are in desperate need due to a deadly combination of conflict and drought. It seems unimaginable that it could happen in 2017 – but one in nine people don’t have enough food to eat.

We are there. We are currently on the ground helping people facing starvation in countries like Ethiopia, Nigeria, Somalia, South Sudan and Yemen.

These twins – a boy and a girl – were born in Zimbabwe, which last year experienced its worst drought in 35 years. Their mother Judy (36) fears for their future but is holding onto hope. Along with our partners in southern Africa we are working to ensure everyone has access to nutritious food and sustainable food sources – and we’re providing water and sanitation to people affected by the drought too.

We want to make sure that families like Judy’s always have enough to eat and clean water to drink because these essentials aren’t just for some people, they’re for everyone.

Our World’s Rainy Day Fund helps brighten the outlook for people in poverty.

The EU should resist political pressure and ensure its upcoming blacklist of tax havens objectively reflects the criteria it has itself set if it is serious about fighting tax avoidance, Oxfam said today.

The international organisation said that an honest appraisal of the role that different states play in facilitating tax dodging is crucial if European countries are to effectively tackle a problem that deprives them and poor countries of vital funds that could be used to fight poverty.

Oxfam’s new report, Blacklist or Whitewash?, names the 35 countries that should feature according to the EU’s definition of a tax haven, including six that are linked to the UK: the British Virgin Islands, Cayman Islands, Bermuda, Jersey, Gibraltar and Anguilla.

The EU has excluded member states from its blacklist. Oxfam is also urging the EU to act to reform the tax systems of countries like Ireland, Luxembourg, the Netherlands and Malta, which it found met the criteria for being tax havens.

The EU is expected to publish its blacklist next Tuesday after analysing 92 countries and jurisdictions against criteria including financial secrecy and facilitating profit shifting – but political pressure from inside and outside the EU means some of the world’s most notorious tax havens, such as Switzerland, may be left out.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

Last year more than 300 top economists, including Nobel Prize winner Angus Deaton, warned there is no economic justification for tax havens and urged world leaders to take on the powerful vested interests that benefit from the status quo.

Oxfam is calling on the UK government to take responsibility for its own offshore backyard by requiring Britain’s overseas territories and crown dependencies to publish registers revealing the real owner of companies registered there. None has yet complied with the UK government’s request to do this, first made by David Cameron in 2013. Private registers are not an adequate substitute as they would not be open to full scrutiny, especially by authorities in poor countries.

Oxfam’s report highlights how multinationals are able to use the UK’s overseas territories to shift profits through interest payments on artificial loans between their subsidiaries. Income from interest represented 73 percent of GDP in the Cayman Islands and 40 percent of GDP in Bermuda.

Clarken added: "People are fed up with double standards that mean some companies and wealthy individuals can funnel money through tax havens to avoid paying their fair share of tax, while ordinary people in the UK and overseas are struggling to get by. With growing cross party consensus on this, the Government should not delay further action to end tax secrecy in UK-linked tax havens and to require UK-based multinationals to publish their tax payments in every country they operate."

The EU’s tax haven blacklist is being drafted in secret, which makes scrutiny impossible. Malta has publicly lobbied for an empty list and the Swiss government has announced it does not expect Switzerland to be included.

Oxfam believes the EU’s blacklist criteria are a step in the right direction but should be extended to address other harmful tax practices such as the race to the bottom on corporate tax rates.

A recent YouGov poll found that almost three quarters of the public think the government should be doing more to tackle corporate tax dodging. There is cross party support for doing more to tackle tax avoidance, including greater transparency for companies and in UK-linked tax havens.

· More royalties sent out of Ireland than rest of EU combined, equivalent to 26% of GDP in 2015

· New Oxfam report urges EU to tackle tax avoidance within member states

Tuesday, 28th November 2017

A new report published by Oxfam today has identified Ireland as one of four EU countries which would be blacklisted1 as a tax haven if the EU were to apply its own criteria to member states.

The EU is currently drafting a blacklist for tax havens, analysing 92 non–EU countries and jurisdictions against a set of three criteria, which include tax transparency and policies that facilitate large-scale profit shifting. However, this process excludes EU member states, meaning that they will not be assessed.

For the first time, Oxfam has applied the EU’s own criteria to 92 countries worldwide as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist.

Furthermore, four EU member states: Ireland, Luxembourg, the Netherlands and Malta also met the criteria for being listed as a tax haven.

Ireland fails to meet the second criterion on fair taxation and the facilitation of tax avoidance. For example, the report establishes that royalties sent out of Ireland were equivalent to 26% of the country’s gross domestic product in 2015. That is more royalties than are sent out of the rest of the EU combined, and makes Ireland the world’s number one royalties provider2.

Jim Clarken, Oxfam Ireland Chief Executive, said: “As Ireland fails the EU’s blacklisting criteria, it is clear that the Government has questions to answer with regard to its stated commitment to tackling tax avoidance. In the past, the case has been made that because Ireland’s tax arrangements fulfilled OECD standards there was no substantiation that Ireland matched the conditions associated with tax haven status. The OECD’s blacklisting process has been called into question due to the fact that it only listed one country Trinidad and Tobago as a tax haven.

“The analysis in this report uses the very measurements the EU is currently applying to 92 non-EU states to assess whether they should be blacklisted as tax havens. Sadly, this analysis places Ireland in an elite club with four other EU countries; Malta, Luxembourg and the Netherlands.”

The report, Blacklist or Whitewash: What a real EU blacklist of tax havens should look like, shows how financial flows are often completely out of proportion with the tax havens’ real economic activity. In the British Virgin Islands, foreign direct investment amounts to 90,000% of the country’s GDP. For the Cayman Islands, it represents 5,400% of the GDP, for Malta 650% and for Luxembourg approximately 400%.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible. The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted.

Oxfam is also urging the EU to put rules in place to reform the tax systems of EU countries like Ireland, Luxembourg, the Netherlands and Malta which meet the EU’s criteria for being listed as a tax haven.

Mr Clarken continued: “An ambitious and objective list of tax havens with strong countermeasures is a concrete and powerful way to clamp down on tax avoidance which deprives countries of hundreds of billions of dollars, fueling poverty and inequality. If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

2. Passive income such as royalties for Intellectual Property (IP), which companies are known to use to avoid tax. High levels of these payments far above normal economic activity indicates that the jurisdiction is facilitating tax avoidance.

· The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the super-rich get away with billions in unpaid taxes. EU finance ministers are expected to publish the EU blacklist on 5 December at their meeting in Brussels.

· The EU’s listing process uses three sets of criteria to identify tax havens: transparency, fair taxation, and participation in international fora on tax.

· The EU’s blacklisting negotiations have taken place behind closed doors and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.

· Last June the OECD released its own backlist, but the result was farcical and ended up naming only one country, Trinidad and Tobago.

· Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year.

· Switzerland, which fails the EU’s criteria on fair taxation according to Oxfam’s analysis, has already declared they expect not to appear on the EU blacklist. This illustrates the risk that major tax havens might escape blacklisting due to political and economic pressure.

· Following the Paradise Papers, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal.

Christmas songs playing in shops, lights strewn between buildings on city streets, shopping windows decorated with evergreen trees and holly, rosy cheeks on passers-by. The Christmas season has officially begun.

This also means crowded shops, long queues, and heavy bags. Ba-humbug!

Instead of enduring the crowds, waiting in queues and braving the cold, consider nestling up to a warm cup of tea with your internet browser opened to Oxfam Unwrapped.

Leave the soap and lotion gift baskets at the shops. Instead, purchase our soap stocking filler for a family member. Money raised from your donation supports humanitarian work from our Saving Lives fund. It provides people like Binta and her daughter Fati in Niger with hygiene training to keep them from illness and deadly diseases.

Want to get something sweet for a friend? Instead of picking up the predictable box of chocolates, make a donation to our Livelihoods fund by buying a honeybees gift card. This purchase helps fund the communities who depend on animals for their livelihoods. It empowers people like Augustina in Ghana. Through an Oxfam-supported beekeeping project, she was able to earn additional income to pay her children’s school fees.

When drought struck Somaliland, Faria moved with her children to Karasharka Camp where Oxfam provided safe water. This Christmas, give something better than a bottle of wine or bubbly to your colleague. Consider making a donation to our Water for All fund by purchasing safe water for a family gift card. This gift provides poor communities with safe access to water through pumps, tanks, taps and purification systems.

Your unexpected gift card from the Unwrapped campaign provides the tools, training and resources to support and empower communities. While bringing a smile to your loved one’s face, you will also be building brighter, happier futures. Happy shopping!

Minister Donohoe must support moves on tax haven “blacklisting” at tomorrow’s EU meeting

Responding to the latest Paradise Papers revelations which contain startling information about multi-national companies such as Nike and Glencore and which highlight Ireland’s relationship with Apple, Jim Clarken, Oxfam Ireland, CEO said;

“The latest leaks show the lengths to which major multi-nationals have gone to avoid tax. Tellingly, they claim that “Ireland tied itself in knots hoping to retain Apple”. This is unedifying, damages our international reputation and deprives governments of vast sums in tax revenue.

Tomorrow in Brussels, EU finance ministers will discuss setting up a blacklist of tax havens. Blacklisting is one measure which can be effective for tackling tax avoidance, so Minister Donohoe needs to express Ireland’s unequivocal support for the move."

Corporations such as Apple, Nike and Glencore spend millions lobbying governments to water down tax reforms. The 50 biggest US companies, including Apple, spent an estimated $352 million lobbying on tax issues in the country between 2009 and 2015 while receiving over $423 billion in tax breaks. For every $1 they spent lobbying on tax issues they received an estimated $1200 in tax breaks